• The European Sovereign Debt Crisis - Paving the Way towards Financial Stability
  • November 15, 2011 | Authors: Marius A. Boewe; Simon G. Grieser; Andreas Lange; Jens Peter Schmidt; Jörg Wulfken
  • Law Firms: Mayer Brown LLP - Düsseldorf Office ; Mayer Brown LLP - Frankfurt am Main Office ; Mayer Brown LLP - Brussels Office ; Mayer Brown LLP - Frankfurt am Main Office ; Mayer Brown LLP - Brussels Office
  • The current European sovereign debt crisis has principally emerged with the problems of Greece, where decades of misleading accounting and statistics have brought the country to the verge of collapse. But financial difficulties have also arisen in Ireland and Portugal, and more recently in Spain and Italy, although in these countries the problems have different origins and characteristics. Portugal suffered from a prolonged period of low growth and low competitiveness and Ireland was hit by the consequences of a reckless financial boom and the burst of a real estate bubble. Similarly, the problems in Spain originated from the burst of a pronounced real estate bubble. The recent troubles in Italy stem from a prolonged period of low growth and high public debt, coupled with the lack of structural reforms and political credibility.